Remortgaging for Home Improvements
One of the main reasons that people approach us for a remortgage is to fund improvements to their homes. In a recent podcast, we explored this in more depth. Here’s a summary of the discussion.
How does remortgaging for home improvements work?
If you’re interested in remortgaging, our first step is to look at the current value of your property and the mortgage you still have outstanding. This gives us an idea of the equity in your home; in other words, how much of the value you have paid off. You can potentially release this money to complete home improvements – or for any other purpose.
We then run a search across nearly 12,000 mortgages to find the best solution available for you.
What does remortgaging for home improvements require?
So you will need an amount of equity in the property, and we will need to make sure that the new mortgage is affordable to you. We look at your income and expenditure as with any new mortgage, to make sure that the payments will be comfortable.
Next, we need the usual suite of paperwork. You may need bank statements, proof of identity, and address to get an Agreement in Principle.
Is it a good idea to remortgage for home improvements?
In many situations, yes. Not only are you able to make your home more suitable for your needs, but you may even benefit from a better rate of interest with the new mortgage deal.
Some lenders may look at the type of home improvements your planning and carry out an ‘after work evaluation’ – to give you an idea of what your property will be worth once the work is complete.
A remortgage is usually the most affordable way to fund improvements – you will get much cheaper interest rates. Some clients even find they can complete their home improvements at little or no increase to their current monthly spend.
Are there any alternatives to remortgaging for home improvements?
Some improvement companies offer their own unsecured finance plans, but these are often an expensive way to borrow. Unsecured finance is usually for a short period of time so the monthly payments may be fairly high.
Your bank or building society will also offer loans. You could take out a secured loan on your home. This is sometimes called a second mortgage but again, it will have a higher interest rate than a standard remortgage.
How much can you remortgage for home improvements?
The maximum remortgage is generally 90% of the property value. You can estimate the value of your property using online tools then calculate 90% of that amount, minus your existing mortgage. This is the amount you could release for the work.
How can a Mortgage Broker help?
We’re here to support your remortgage right the way through to completion, and we’re on hand to help you any time.
We’ve supported hundreds of clients to fund successful home improvement projects – from new conservatories and loft conversions to two-storey extensions. We’ll spend time with you exploring your plans and finding the best way to achieve them. Get in touch for more details.